Few Surprises In 2010; What Will 2011 Hold?

 

There have not been a great many surprises in the world of California land use planning and real estate development during 2010. At least that’s what I can see now, with the year nearly complete. But in late 2009, I made three predictions for the coming year that turned out to be about half right.

My three predictions were:

• Housing production will increase. This was too easy, and I was right. But not by a lot.

• The SB 375 backlash will start to hit. A number of builders and local government officials jumped off the SB 375 bandwagon this year, but I expected the fallout to reach the general public. It didn’t. I got this one half right.

• Redevelopment deadlines will get delayed by at least 30 years. I thought this would be part of a state budget deal in which the state would get a permanent slice of redevelopment agency revenues in exchange for permitting agencies to remain in business past existing sunset dates. Wrong.

Here’s a little more detailed review of things, followed by three new predictions for 2011.

In 2009, California builders pulled permits for 36,209 housing units – the smallest number since record-keeping began during the 1950s, and almost certainly the slowest rate of housing construction since World War II ended. Through the first 10 months of 2010, builders started 34,508 housing units and were on track for a full year total of 41,700, according to the Construction Industry Research Board. That would be a 15% increase from 2009, but still the second lowest number on record and truly a pathetic building rate in a state that continues to add more than 300,000 residents per year.

Implementation of SB 375 – the 2008 legislation that requires reduced greenhouse gas emissions from vehicles as a way to force coordinated land use and transportation planning – advanced in September when the California Air Resources Board adopted GHG emissions reduction targets for metropolitan planning regions. While the targets largely cheered environmentalists and infill development proponents, the California Building Industry Association and some construction trade groups argued the targets were unrealistic and would hinder economic recovery. Also, the state board backed away from its target for the biggest region when the Southern California Association of Government’s Regional Board voted against the target.

Redevelopment was not much of a topic at the Capitol this year, and the state budget finally adopted in October did not touch the issue. However, investigations produced in early fall by a state Senate office and the Los Angeles Times chronicled redevelopment abuses in some jurisdictions. Lawmakers have yet to react in a significant way.

That was the year coming to a close. I’ll try to improve on my .500 record during 2011, for which I predict:

• The infill-environmental justice conundrum will get deeper.

Call it infill, call it redevelopment, call it reinvestment: the trend of cramming more and more people and buildings in existing urban areas will continue to grow in 2011. Senate Bill 375 steers cities and regions in this direction, and many advocates would like to see the California Environmental Quality Act further streamlined to encourage infill projects. Meanwhile, people who have lived in some of these urban areas for years – often people of color and modest means – will continue raising good questions about the environmental impact of more development in their neighborhoods, and about the social impact of gentrification. This latter group may very well have a powerful ally in incoming Attorney General Kamala Harris, who made civil rights and environmental protection cornerstones of her campaign.

• The Governor’s Office of Planning and Research will rise again.

During the Davis and Schwarzenegger administration, OPR’s prestige and policymaking role diminished. Both governors appointed political associates to run the office, and the ranks of actual planners and researchers shrank. Schwarzenegger went so far as to call the office a “total waste” and proposed eliminating it, a move the Legislature resisted.

The first Jerry Brown administration marked OPR’s true heyday. The agency undertook groundbreaking research and proposed state growth policies that may have been decades ahead of their time. I’m not predicting the return of Bill Press, who was Brown’s OPR director long ago. But Brown’s eight years as mayor of Oakland appear to have made him even more of an urbanist and to have educated him about the struggles of planners and developers who are trying to do the right thing. The new old governor will ensure this agency is more than a place to park political cronies.

• State lawmakers will introduce at least 20 bills concerning redevelopment agencies’ low- and moderate-income housing obligations.

Affordable housing advocates have long complained that some small and medium-sized cities waste the 20% of redevelopment tax increment that must be devoted to providing low/mod housing. The well-documented report by the Senate Office of Oversight and Outcomes supports the argument. In 2011, we will see a number of bills that would limit the amount of low/mod housing money redevelopment agencies may spend on planning and administration. We could also see legislation that modifies the low/mod housing mandate in ways that housing advocates find distasteful. And I wouldn’t be surprised to see California Redevelopment Association-sponsored legislation that attempts to head off draconian changes to the system.

– Paul Shigley